FISCAL NOTE

Date Requested: February 13, 2018
Time Requested: 01:16 PM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2622 Introduced HB4587
CBD Subject: State Personnel


FUND(S):

PEIA

Sources of Revenue:

Special Fund

Legislation creates:

Increases Existing Expenses



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The purpose of this bill is to cap the amount of contribution and out of pocket expenses for state employees for their Public Employee Insurance Agency health insurance. This fiscal note will increase costs to the state. By removing the ability of the plan to increase costs to employees, all future healthcare cost increases will be borne by the state and must be provided to PEIA as non-premium revenue. There will be no way for the plan to manage the plan with necessary benefit changes.
    
    The current PEIA financial plan, through fiscal year 2022, assumes State Fund healthcare costs to increase at a rate of approximately nine percent per year. In total this requires $269 million in increased revenues. The employee portion of this increase is approximately $48 million.
    
    With passage of this bill the state would incur a minimum of an additional $48 million in additional costs within the current financial plan alone. This would be in addition to the state‚Äôs share of $221 million of these increased costs. Due to healthcare cost trends, this additional amount will continue to increase each year.
    
    This fiscal note only includes the costs for State Fund employees. Inclusion of retirees would cause additional costs to the plan and adversely impact the unfunded other post-employment benefit liability.
    
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 12,000,000
Personal Services 0 0 0
Current Expenses 0 0 12,000,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    The current PEIA financial plan, through fiscal year 2022, assumes State Fund healthcare costs to increase at a rate of approximately nine percent per year. In total this requires $269 million in increased revenues. The employee portion of this increase is approximately $48 million.
    
    The average annual increase for the $48 million is $12 million.



Memorandum


    The current PEIA financial plan, through fiscal year 2022, assumes State Fund healthcare costs to increase at a rate of approximately nine percent per year. In total this requires $269 million in increased revenues. The employee portion of this increase is approximately $48 million.
    
    The average annual increase for the $48 million is $12 million. This amount will continue to increase at a rate of approximately eight percent per year.



    Person submitting Fiscal Note: Jason Haught
    Email Address: jason.a.haught@wv.gov